What’s the difference between inheritance tax and estate tax?

Video Transcript

Estate taxes apply based on the value of an estate. If the estate is over a certain amount–for example, if the estate in 2016 is over 5.45 million dollars–an estate tax will apply. An inheritance tax is imposed on a beneficiary of an estate and it’s based on the relationship of the beneficiary to the decedent. Few states have an inheritance tax. Florida does not have an inheritance tax, nor does Florida have an estate tax. Florida residents only need to worry about the federal estate tax, which applies on estates over 5.45 million dollars in 2016 and will keep increasing as it’s adjusted for inflation.